I have savings and investments I could tap. With the only debt being the mortgage, that's an easy payoff. I also have short term disability coverage, long term disability coverage, life insurance, etc.
One way is not better than the other. They are just different. Now, using debt to live above your means is a totally different story. That's never a good idea. I am curious to know one thing...if I can finance something for 0%, and I have the cash to buy it, what is the downside to financing it at 0% and letting the cash earn investment income?
I've looked into a lot of the 0% financing offers. Like stater earlier, most (nearly all) are either a 0% financing, or a discount for cash payment. If the 0% financing price is actually higher then the cash price, how can it be 0% financing?
Your paying the financing cost up front, and then they are hoping you don't make that last payment by the date set, or they get to charge you more financi8ng charges, back to the original purchase date. You can keep believing its really 0 % financing if you want.
A couple years ago, we bought new flooring for our house. The company was advertising 0% financing, but the cash price was $1,000 cheaper. Please explain how that works.
BTW, our credit score is over 800 with no debt of any kind. Gene
The 0% interest loans are an incentive from the manufacturer. Its truly interest free. Any single penny you pay above that is on you for being late on a payment.
The unit you are buying has the same dealer price if you pay cash or finance it. If a Ford employee walks in and wants a new truck, the price is fixed, its better than anybody can get. Whatever that price is, you get 0% from that price, or no zero% and instead more money off from Ford in the case of a rebate.
Where the difference in price comes in is from the manufacturer via a rebate. That comes over above the deal the dealer cut you. You have the ability to go to your bank and see what rate they will give you. Do a little math and figure out if say a loan at 4% and say a 4000 dollar rebate will save you over no rebate and 0% interest and not getting the 4 grand rebate.
Regards your above example..... do you think the flooring company can loan money at 0% interest without it costing them something. Use your head bud. It isn't that hard.
They “ buy down” the rate. In other words, say they can get money for 3%. They pay the difference to give you an option. The other option Is to just knock money off( your 1000 bucks) and let you get your own financing.
Quick example..
You go in and want 30K in flooring.... they offer you your choice, they knock a grand off and you finance the 29k that is left at your bank at 4% for 5 years.
Or you finance the whole 30 grand and they give you 0% but not the grand off.....
Well, taking the 0% offer would save you three times as much as getting the 1000 off and going to YOUR bank.
Now, do you see it costs them more in the above example to give you zero% than a 1000 off? You seem to not know dealers nor GM nor Ford nor Honda nor anybody prints money at zero%. They PAY to make that money available to you for free, zilch, no interest
